Virgin Group sells Megastores chain in U.K.
EmptyLONDON -- Entertainment retailer Virgin Megastores said Monday that it has completed a management buyout of its 125-store chain for an undisclosed amount.
Zavvi Entertainment Group, a vehicle led by managing director Simon Douglas and finance director Steve Peckham, will continue to operate all of the existing U.K. and Irish stores under the name Zavvi, as well as the company's recently revamped online offering.
The buyout is fully supported by the Virgin Group board, and Zavvi will continue to be supplied by EntertainmentUK, the company's primary supplier.
As part of the management buy out, all U.K. stores will be rebranded Zavvi by November with the Web site and Irish stores following in January.
"For over 30 years, Virgin Megastores has benefited from being part of the Virgin Group and from the unstinting support of Sir Richard Branson," Douglas said. "We are delighted to be given the opportunity to build on that legacy."
Virgin Group chairman and founder Richard Branson said he wished the retail team well, adding that he decided to sell the loss-making chain because entertainment retailing was no longer central to the business.
"We now choose to franchise our global entertainment retail operations, rather than own them, and this was the last significant Virgin wholly-owned retail business in the world. With that in mind we have agreed to a management buyout with the excellent management team led by Simon Douglas and Steve Peckham," Branson said in a statement.